PPF banka a.s.: Financial results for 1H 2011
Net profit of CZK 431.5 million for 1H 2011 confirms the bank´s stable profitability at a high level.
PPF banka a.s. (“PPF banka”), in which a 92.96% stake is held by PPF Group N.V., announces its financial results under the Czech Accounting Standards (CAS) for the period ending on 30 June 2011.
“The bank steadily continues to generate net profit, which amounted to CZK 431.5 million for the first half of 2011 and is higher than in the preceding year. The drop in the share of classified loans to 5.25% is also favourable; of this, loans that were past due for over 90 days dropped to 2.63%.”
Petr Milev, Chairman and CEO
• A year-on-year growth of 4% (+ CZK 21 million) in PPF banka’s profit after tax for 1H 2011, to CZK 431.5 million compared with CZK 411.7 million for 1H 2010;
• The bank’s equity increased by 18% year-on-year to more than CZK 4.65 billion, with an increase of 11% since the beginning of 2011;
• The bank’s profitability in terms of return on equity (RoE, 22%) and also its capital adequacy ratio (CAR, 12.4%) continue to be at a high level.
PPF banka forged ahead with its strategy of providing bespoke financial solutions to corporate clients, financial institutions and municipal and public clients, including the PPF Group’s companies. Last but not least, it is also actively pursuing new projects such as export and structured financing and the financing of medium-sized and smaller enterprises.
Like the year before, in the first half of 2011 PPF banka profited from the quality of its credit portfolio and rising net interest income, and also from the increasing share of income from fees and commissions. PPF banka’s total assets were stable year-on-year at CZK 53.2 billion at the end of the first half of 2011, which is primarily attributable to the seasonal nature of municipal clients’ short-term deposits.
The volume of loans provided to clients decreased year-on-year by 16.96%, to CZK 18.1 billion from CZK 21.8 billion, but the growth in the volume for the second quarter is a solid 8.40%. Despite the decline in profit from financial operations, very good results were achieved with the help of the increasing net income from fees and commissions and also net interest income.
Despite the persisting economic crisis, through its active work with clients that have classified loans PPF banka reduced the share of classified loans to 5.25% of its overall loans to clients as at 30 June 2011, compared with 7.72% as at 30 June 2010, with the share of substandard, doubtful and loss loans in the first half of 2011 slightly decreasing from 2.96% to 2.63% of the volume of all loans to clients.
With its total assets stable, PPF banka’s capital adequacy ratio is around 12% (12.43%), while its return on average equity (ROAE) is at a very good level of 22% for the first half of 2011.
PPF banka generated a net profit of CZK 431.5 million as at 30 June 2011, which implies a growth of 4.8% on the figure of CZK 411.7 million for the first half of 2010. This result is mainly attributable to the following:
• on a year-on-year basis, net income from fees and commissions is two times higher, having increased from CZK 100.4 million for the first half of 2010 to CZK 219.2 million for the first half of 2011, thereby outperforming the level of FY 2010;
• net interest income grew year-on-year by 26.2% to CZK 564.3 million;
• administrative costs increased by 15% year-on-year in connection with the expansion of the bank’s business, which resulted in a 21% increase in the bank’s staffing of its ongoing projects year-on-year.
PPF banka prepares and publishes its financial results under Czech Accounting Standards (CAS) and under International Financial Reporting Standards (IFRS). Financial results under CAS may differ from those under IFRS.